virtual 2022 Edition Insurance Automation Group (Booth #20) Advanced Digital Technologies Brings New Efficiencies and Benefits to the Surety Value Chain Now, that may be a funny way to illustrate a serious topic, but is a good example how new technologies can help producers save money and reduce E&O exposure. Let’s break it down… Under a typical manual process, there are several steps that need to happen; from printing the document, to signing, crimping, and scanning
o The risk of overpricing materials is reduced o Such a clause may allow a project to move forward in an uncertain market and may even expand the number of bidders What are the drawbacks of a price escalation clause for an owner? o The risk of a price increase is shifted to owner What are the benefits of a price escalation clause for a contractor? o The contractor is protected if market conditions worsen What are the drawbacks of a price escalation clause for a contractor? o Price escalation clauses may take away upside from the contractor for taking on greater risk o Additionally, more cost information must be disclosed by the contractor What are some of the best practices for drafting a price escalation clause? o Identify the materials to which the clause applies o Define the baseline cost upon which the contract pricing is based o Define the price increase/decrease that triggers the clause – material prices must increase/decrease by a certain amount or a percentage over the base amount before the clause is triggered o Consider whether the clause will be cost-based or index-based o The clause should include a written notice requirement tied to when the counterparty becomes aware of the material price increase or decrease If you need help in drafting a price escalation clause, hire an attorney
The Cashion Company Insurance and Bonding, LLC P. O. Box 550 Little Rock, AR 72203 (501) 975-9975 Mattc@cashionco.com Mark Duggan Lockton Companies, LLC 1715 Aaron Brenner Dr
Annual Meeting Program Committee The Cashion Company Insurance and Bonding, LLC P. O. Box 550 Little Rock, AR 72203 (501) 975-9975 Mattc@cashionco.com Christian Downey Small & Emerging Business Committee Downey and Company 6565 Americas Parkway, NE Suite 750 Albuquerque, NM 87110 (505) 228-3913 cdowney@downeyandco.com Mark Duggan Annual Meeting Program Committee Lockton Companies, LLC 1715 Aaron Brenner Dr. Suite 512 Memphis, TN 38120 (901) 757-6931 mduggan@lockton.com Emanuel Hatjygeorge 5-15 Leadership Committee EP George Inc. 150 White Plains Road Suite 106 Tarrytown, NY 10591 (914) 829-8345 manny@epgeorge.com Michael E. Lischer, Jr. Automation and Technology Committee IMA, Inc. 1705 17th Street Suite 100 Denver, CO 80202 (303) 615-7477 michael.lischer@imacorp.com Toby Miclette Industry Relations Committee Bowen, Miclette & Britt Insurance Agency, LLC 2800 North Loop West, Suite 1100 Houston, TX 77092 (713) 880-7109 tmiclette@bmbinc.com Nicholas L
Below are some drafting and negotiating tips that may help thread this needle and give you better arguments for enforceability. Do o Explain specifically why actual damages for the breach are difficult to estimate in the liquidated damages provision itself. For instance, on a commercial office project, note that it is difficult to estimate lost rental income in advance. o Document how you come up with the liquidated damages amounts at the time you are drafting and negotiating the provision
For the architect a professional liability (E&O) policy should be required
Lisa Colon , Sarah E. Carson , Matthew E
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